(03-06-2021, 12:17 PM)NilesMike Wrote: Make your list of quality DGI stocks, no limit as to the number of tickers.I like Mike's plan even better than the paragraphs I already typed. Excuse me original poster while I talk about you right in front of you.
Divide your available investment cash pile into 20 lumps.
When a stock on your list drops 10% off a prior high, you buy it with one lump. If it drops another 10% you spend the second lump on it.
Some will fall even lower of course but you have bought at reasonable prices and should be able to withstand some drawdown.
Others will pull back 10% and zoom, leaving you only 1 lump invested-for now.
Just be patient and buy what your analysis shows are quality stocks.
Pull up some charts on the Aristocrats and you will see how well this simple method works, especially if you have time on your side-unlike Fenders and me.
You clearly prefer planning things out neatly and that's great. Here is what I smelled coming next week when I read the first post. "I just put about 5% each in these 20 DGI stocks because I got some cash coming soon." Yeah don't do that because it's not wise lol. I'm sure you'd like to knock some of the volatility out of you leveraged port after this weeks beatdown?. Buying a bunch of stodgy companies near all-time highs may not give that result. The market has shifted to value, for now. Make your list and Mike is right, no length limit with one caveat. You do some DD and put no crap on your list. We are never too shy to tell ou when you come up with a bad idea. Kidding but not really. I'll stick with my earlier advice. I'll sell it and buy a share of something else. What's the harm in a no commission world? Grossly overpay and you will question the DGI strat for years.
Restated, Mike and I aren't so arrogant to think we can time the market, but we know a frothy market when we see it. You aren't old as a dirt clod like Mike
, but you don't have 45 years to compound either so valuation does matter. It's been said our total return is predestined the day we purchase. I have found that to be true when buying mature companies. JNJ isn't likely to run 3X in 10 years so we shouldn't pay the 52WK high price. JNJ is a handy example because it actually is down about 10% and ready for a purchase IMO. And you don't have to buy at down 10-20-30. I'd probably tweak those numbers. It could lead to you skipping the very best DGI stocks because the lesser dropped much faster as they are inclined to do. The initial list is important so you aren't sifting through dumpsters for a dividend stock down 20%. It's OK to buy a share of an overpriced company to get it in the port. I have found that useful inspiration. I have also sold off a couple shares that ran 40% before I had a chance to build a position. That stinks but better than a poke in the eye. I bought two shares of GNRC and it promptly ran $70 on a week of bad TX weather. I sold it because I thought it was gone forever and lookie there, it's dropped $50 in just a few weeks. I might get another chance to buy it like I mean it. It's hard not to force trades, or beat yourself up in the short term for missing one.